The Government of Montenegro invites experienced international investors with substantial financial resources and a proven track record in the design, construction, marketing and management of exclusive mixed use resorts to express their interest in the long-term lease of Velika Plaza, an expansive and unique seashore area, for the purpose of developing, constructing, and operating an integrated leisure community of world class quality on this unique site.

Velika Plaza, with 13 kilometers of pristine fine sand beach, is in many regards an opportunity unique in the Adriatic, and perhaps, in the Mediterranean region. The intention of the Government is to assure the development of this special place in an economically and environmentally sustainable manner, transforming it into a unique, upscale multi-use destination offering a range of leisure and recreational activities which are conceptually, aesthetically, and functionally in harmony with the beauty and environmental richness of the site.

I. Project Description

Montenegro’s diversity of striking topography and rich recreational opportunities, strong government support for the industry, and extensive branding efforts are reflected in a highly dynamic tourism sector and in growth in both awareness and visitation among a broad range of origin markets. Montenegro is projected by the World Travel and Tourism Council to be one of the fastest growing tourism destinations in the world over the next eight years, with 8.6% annual demand growth projected through 2016. And the World Economic Forum has recently rated Montenegro as first in the world in attitude towards foreign visitors, first in affinity for travel and tourism, and third in government prioritization of the tourism industry.

Velika Plaža is located in the southernmost part of Montenegro, between the town of Ulcinj and the nature reserve and resort of Ada Bojana Island. The fully navigable Bojana River connects Velika Plaza with Skadar Lake, one of the largest lakes in Europe and an important nature enclave and bird habitat, surrounded by striking topography. Velika Plaža offers a sweeping fine sand beach which is over 13 kilometers long and 60-100 meters in width, making it quite unusual in the Adriatic and Mediterranean. The length of beachfront and expansiveness of the site as a whole offers an exceptional opportunity for upscale development which combines moderate densities with a scale sufficient to offer attractive returns on a well planned and implemented project. The size of the site will also allow a range of uses including hotel accommodation, various residential configurations, marine tourism, and a range of sporting and leisure activities such as golf.

Velika Plaza covers an area of approximately 1,450 hectares, some 60% of which is owned by the State of Montenegro. It is the intention of the Government to enter into a long-term lease agreement, with the right granted for development and operation of multiple resort components, all of which must meet the highest international standards of design and operation. It is expected that the resulting resort(s) will be a model of well conceived and executed development that is consonant with, and complementary to, the beautiful natural surroundings.

II Development Intent

The Regional Master Plan for Ulcinj, within which this site is included, envisages the development of upscale, international standard development of the highest quality on this site. The “Special Purpose Spatial Plan for the Coastal Zone – General Concept for Velika Plaza” has divided the site’s capacity into six sections or “modules” as follows (please note that capacities are noted in beds, not rooms):

Module 1 (Existing area of development) – Capacity as currently configured.
Module 2 – 6,000 beds
Module 3 – 6,000 beds
Module 4 – 5,500 beds
Module 5 – 5,500 beds
Module 6 – 2,000 beds.

These capacities are to be considered as maximums, and proposals which are economically viable, but which utilize lower densities of accommodation while still maintaining an appropriate balance between hotel, residential, meeting, recreational and other facilities, are encouraged.

The area of existing development (indicated in orange, blue and brown on the map above) will not be included in the transaction. Proposals that include one or more modules (indicated in red above) or the full site (all modules in red above) will be considered.

Velika Plaza represents an opportunity that is unique in the region in its combination of expansive scale, many kilometres of high quality beachfront, and flexibility of use. The Government of Montenegro is committed to assuring the full realization of this asset in a manner that is consonant with the highest standards of responsible development, quality construction, innovative and aesthetically refined design, appropriate density, and operational quality. The Government believes this goal will best be realized by a developer and operator of substantial experience, strong reputation, demonstrated commitment to quality, and sensitivity to ecological and social requirements. At the same time it is recognized that these goals will be met over the long term only by allowing the appropriate developer and operator the opportunity for a reasonable return on investment.

Velika Plaza represents a truly unique asset whose full potential can be best realized through high quality, sustainable, innovative development that brings a long term perspective, and a commitment to balanced use. Development which preserves the beauty of the area, and maintains the very characteristics that visitors increasingly seek – beautiful vistas, connection to nature, clean water, etc. – will allow the greatest value possible to be created for both investors, the community, and the Montenegrin people.

It is expected, in sum that Velika Plaza will serve as a model for ecologically, socially and financially sustainable high quality development over the long term. It will create a leisure, living and commercial setting of the very highest quality in which those visiting, living or working in this new and vibrant community feel a sense of place and of connection with nature.

III. Financial Structure and Requirements

In addition to the preferred long term lease structure, alternative financial structures (for part or all of the property) will be considered, including joint venture, public-private partnership and other arrangements, should such alternatives both facilitate the highest and best use of the asset, and maximize and fairly allocate created value among the various parties.

While development may be phased, the scale and anticipated nature of this project will require substantial investment. Bidders will be required to verifiably demonstrate the financial capacity to initiate and fully complete all proposed aspects of the project on a timely basis.

IV. The Tender Process

Stage 1 – Expression of Interest
Through this Invitation for Expressions of Interest, potential bidders are invited to express their interest in the project, and to provide a summary of overall qualifications, expected financial and operational partners, and the areas/modules in which they are interested. The Expression of Interest should contain information on the potential bidder’s financial and operational resources, a summary of relevant experience, description of all members of any potential bidding consortium, and a general overview and concept statement for the proposed development. In addition, in their Expression of Interest, prospective Bidders should, in general terms, propose a preferred financial structure.

A site visit will be arranged and additional information will be offered for qualified parties responding to this invitation.

The expression of interest in this project carries no fee or obligation to the potential bidder. Expressions of Interest must be submitted to the address provided below not later than the close of business in Podgorica, Montenegro on June 16, 2008.

Stage 2 – Evaluation of Qualifications
Expressions of Interest may be made on behalf of a group or consortium (such as multiple investors and operators), assuming that the potential bidding group collectively meets the following requirements:

• Prospective bidders must have substantial experience in the planning, development, construction and management of similar projects, as well as the organizational and technical expertise to ensure complete and timely compliance with the spatial, aesthetic, design, engineering, technical and regulatory requirements of a project of the scale, complexity and environmental sensitivity of Velika Plaza.

• The prospective bidder must itself be, or must include as a part of a potential bidding consortium, at least one high quality international hotel operator and brand recognized internationally as successful operators of multiple resorts of a similar in quality and scale to that proposed. The operator should be recognized for innovative, high-quality design, as well as superior operations and marketing. The brand should be relevant and appealing to anticipated geographic, demographic and psychographic target markets for this resort, and should be able to apply powerful marketing abilities and tools. The brand should be recognized internationally for its association with renowned properties of the highest quality, as well as its appeal to upscale, discerning international guests.

• The prospective bidder must demonstrate the financial resources and technical ability to complete the proposed project completely and on a timely basis.

Expressions of Interest will be evaluated by the Tender Commission and its advisors to assure that potential bidders meet basic qualifications, as described below. Potential bidders will be notified on a timely basis after the deadline for submission of Expressions of Interest whether they are deemed to meet the basic qualifications described herein and thus eligible to bid.

Stage 3 – Bid Submission and Evaluation
Detailed information about the site and the tender procedure will be included in tender documents (including Instructions to Bidders, an Information Memorandum, a Draft Lease Agreement, etc) which prospective bidders may purchase upon the formal announcement of the tender, currently anticipated to occur in —, 2008. The tender documents will describe in detail the scope and nature of the site, expand on the characteristics of the desired development, establish the criteria for selection, and specify the requirements for bid content.

Bids will be evaluated and ranked using an explicit scoring system, to be detailed in the bidding documents, which will identify, score, and weight various quantitative and qualitative criteria such as developer qualifications, capabilities and experience, the quality and appropriateness of the proposed design, the expertise and experience of the proposed manager, the relevance and power of proposed brand(s), the structure and value of the financial proposal, etc.

Stage 4 – Negotiations and Finalization
After the selection of the best bid, using the established criteria, and notification to all bidders, negotiations will be initiated with the selected bidder in order to finalize an agreement. If, as specified in the tender documents, such an agreement cannot be reached, the second ranked bidder shall be selected, and negotiations initiated with that party.

Velika Plaza is a truly exceptional asset. The Government of Montenegro is committed to assuring that this special place realizes its full potential through appropriate, innovative and sustainable development that is of the highest standard and quality. We invite you to express your interest in being part of this special opportunity.

Please direct communications and enquiries to:

Ministry for Economic Development of Montenegro
Rimski trg 46
81000 Podgorica, Montenegro
Tel: +382 81 234 127
Fax: +382 81 234 131
Contact person: Biserka Dragi?evi?, Project Coordinator
E-mail: biserkad@mn.yu